A Stimulus Project Gets All Caulked Up

September 24, 2010

When Obama administration officials were selling the idea of a huge federal stimulus program to buoy the U.S. economy, they talked about a plan that would get money into the economy quickly. Instead, spending stimulus dollars fast has turned out to be surprisingly hard, says the Wall Street Journal.

The stimulus package, which has a current estimated price tag of $814 billion, had three components. One was tax breaks for individuals and companies. Another was aid to states to fund unemployment benefits, Medicaid and schools. Nearly all this money has been spent.

The third element was around $230 billion in funding for infrastructure projects ranging from road repaving to modernizing the electric grid. This was to be the most visible element of the job creation effort.

Federal agencies have designated recipients for around 80 percent of the funds, but paid out only about a third of them to date,says the Journal.

Among respondents to a Wall Street Journal/NBC News poll in August, 30 percent thought the plan had "made things better," 30 percent thought it had "made things worse," and 40 percent said it was "too soon to tell" or had no opinion.

The nonpartisan Congressional Budget Office estimates that the stimulus lowered the jobless rate by between 0.7 percentage point and 1.8 percentage points during the second quarter of 2010, compared with what the rate otherwise would have been. But for voters, those figures are being dwarfed by the actual jobless rate of 9.6 percent in August, says the Journal.